S&P 500 closes at a record high

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The most widely followed barometer of the US stock market rose above its 2007 peak to hit a high Thursday, while most of the rest of the world could only look on in envy.

The nominal record set by the Standard & Poor’s 500-stock index is the latest sign that the nation’s economy is recovering some of the strength it had before the financial collapse of 2008, partly helped by stimulus from the Federal Reserve Bank.

It has been a little more than three weeks since the Dow Jones industrial average hit a milestone high, also set in October 2007, but the S&P is considered more representative of the breadth of US stocks.

The S&P reached its new nominal high after several days of flirting with the record as investors struggled with the turmoil caused by Cyprus’s banking crisis. The milestone capped a strong first quarter, in which the index rose 10 percent.

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Meanwhile, stock markets in nearly every other large economy around the world are still well below their previous records. An index of the entire world’s stock markets, without the United States, is still down about 29 percent from the level it hit in 2007, according to analysis by Ned Davis Research.

Only some smaller nations, such as Denmark, Mexico, and Colombia, have fully recovered their losses.

US workers have learned that the stock market’s performance is not always a good gauge of the underlying economy’s strength. Unemployment has remained stubbornly high at the same time that share prices have risen since bottoming out in March 2009.

The S&P 500 finished Thursday up 0.4 percent, or 6.34 points, at 1,569.19. The Dow Jones industrial average climbed 0.4 percent, or 52.38 points, to 14,578.54. That is 11 percent above its level at the beginning of the quarter.

The Nasdaq composite index rose 0.3 percent, or 11 points to 3,267.52, far below the heights it reached during the dot-com boom of the late 1990s.

Economists have given much of the credit for the market’s recovery to the Federal Reserve, which worked quickly with the rest of the federal government to bail out and revamp the nation’s financial system, which the European Central Bank started doing in earnest only last year. While bank bailouts remain contentious, they have allowed the institutions to resume lending.

The Fed also acted on its own to pump money into the economy with bond-buying programs known as quantitative easing. Many central bankers around the world worried such programs would result in extreme inflation.

There are also fears that the US economy will not be able to remain on its current trajectory once the Fed draws back. But all that has not stopped other countries from beginning to copy the Fed’s lead.

‘'The Fed has won the battle, and continues to win the battle,’’ said Jack Malvey, the chief global markets strategist at BNY Mellon.

The other major catalyst for the ascent of the US stock market is the cost-cutting strategy used by corporate executives, which has raised profit and allowed companies to increase dividends to shareholders. That strategy, however, has exacted a toll on workers, who have faced layoffs and pay cuts.

In Europe, by contrast, the greater legal protections offered to workers have made it harder for companies to revamp their businesses.

In many emerging economies, the lagging performances of the stock markets have not necessarily pointed to slower overall growth.

China’s economy, for instance, continues to expand at a significantly faster pace than the US economy. But China’s stock market has suffered because growth is slower than many investors expected just a few years ago.

Even with higher economic growth in some developing countries, investors have sought out US investments as a safe haven during the last few years when big shocks threatened the global economy.

Last year alone, $385 billion in foreign money flowed into US stocks and bonds, while investors in the United States sent almost no new money overseas, according to data released this week by the Commerce Department’s Bureau of Economic Analysis.